The last two weeks have been mind-blowing. In succession Apple launched the iPad, announced iPhone OS 4 (used in iPhone, iPad and iPod touch devices), changes in Apple’s license agreement sent the developer world (particularly Adobe) into a tizzy, and then, as a topper, Twitter bought the maker of Tweetie, a Twitter client.
There is amazing power and tremendous risk in partnering and these four events clearly show the risks and rewards.
Let me be clear that this is no manifesto for going alone. The reality is, as a start-up, we are really made or broken by our initial luck in partnering, whether that’s using someone else’s hardware and operating system, an initial customer, or a strategic relationship with a big partner.
On the positive side, Apple’s iPhone OS and devices running it have brought smartphones to millions of people who never used one before, opening up purchases of third-party apps in a way that has never been done before, and that has created a number of newly wealthy developers (not me). On the other hand a change in two paragraphs in Apple’s license agreement has potentially wiped out a handful of other companies’ businesses.
Twitter has also brought something new to millions of customers, namely a new communication platform. And in one move it might have wiped out thousands of other companies’ businesses by making a choice and buying one of them.
Infinity Softworks has benefited in some ways, too. Almost unrecognized in the iPhone world, being there at launch coupled with Apple’s decision to ship no calculator with the iPad has raised powerOne revenues to breath-slightly-easier levels.
I have learned to ask clear questions about these relationships: Is the partnership short-term or long-term? Is the partner committed to the relationship? Is it likely that we will get in the way of their bigger strategic goals?
Sometimes I guess right. We had a lengthy and fruitful bundling relationship with Palm and other Palm OS licensees, but we were dumped when Palm used an alternative product instead. We were also making tremendous headway in education when Palm decided there was no future in handhelds (ha, ha), shifted focus to smartphones, and fired their education team.
Even when we fit perfectly, it’s not always easy to see how the relationship will work out. (It’s also not every day a company makes a billion dollar investment in a market and then backs out on a dime but that is just the epitome of how poorly Palm’s been run.)
If I’m on the web I’ve got to ask myself these questions about Google, Twitter and Facebook. If I’m reliant on Apple, I’ve got to ask these same questions of it.
And then I have to hope I’m right.